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Injury Investigations in Antidumping and the Super-Additivity Effect: A Theoretical Explanation

  • Poonam Gupta

    ()

  • Arvind Panagariya

Empirical evidence shows that injury investigations in anti-dumping cases conducted by the United States International Trade Commission, the probability of a positive finding is higher when the number of defendant firms is larger, holding constant their total market share. In this paper we offer a theoretical explanation of this finding. We show that the presence of many exporters exacerbates the free-rider problem, which leads every firm to invest less on defense. Thus for the same market share, injury finding is more likely to be positive for many small sellers than a few large sellers.

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File URL: http://hdl.handle.net/10.1007/s10290-006-0060-1
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Article provided by Springer in its journal Review of World Economics.

Volume (Year): 142 (2006)
Issue (Month): 1 (April)
Pages: 151-164

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Handle: RePEc:spr:weltar:v:142:y:2006:i:1:p:151-164
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  1. Wendy L. Hansen & Thomas J. Prusa, 1996. "Cumulation and ITC Decision-Making: The Sum of the Parts is Greater Than the Whole," Departmental Working Papers 199422, Rutgers University, Department of Economics.
  2. P.K.M. Tharakan & David Greenaway & Joe Tharakan,, . "Cumulation and Injury Determination of the European Community in Anti-Dumping Cases," Discussion Papers 97/17, University of Nottingham, CREDIT.
  3. Panagariya, Arvind & Rodrik, Dani, 1993. "Political-Economy Arguments for a Uniform Tariff," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(3), pages 685-703, August.
  4. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry Specific Protection: Antidumping in the United States," NBER Working Papers 4696, National Bureau of Economic Research, Inc.
  5. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
  6. Staiger, Robert W. & Wolak, Frank A., 1992. "The effect of domestic antidumping law in the presence of foreign monopoly," Journal of International Economics, Elsevier, vol. 32(3-4), pages 265-287, May.
  7. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
  8. Anderson, James E., 1993. "Domino dumping II: Anti-dumping," Journal of International Economics, Elsevier, vol. 35(1-2), pages 133-150, August.
  9. Bruce A. Blonigen & Stephen E. Haynes, 1999. "Antidumping Investigations and the Pass-Through of Exchange Rates and Antidumping Duties," NBER Working Papers 7378, National Bureau of Economic Research, Inc.
  10. Thomas J. Prusa, 1998. "Cumulation and antidumping: A challenge to competition," Departmental Working Papers 199814, Rutgers University, Department of Economics.
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